U.S. authorities are investigating Swiss banks that they believe are used by those trying to avoid paying their taxes. The United States wants those banks to cooperate and supply them with information regarding accounts that hold the funds in question. Reuters reported that 10 banks have obliged, somewhat. They have provided the United States with statistical data, but continue to withhold client information.
Included in the bundle of information that has been forwarded is an estimate of the number of U.S. citizens who used secret accounts to avoid paying taxes between 2002 and 2010, Reuters reported.
These faceless statistics can be provided without violating Swiss laws, which are largely tilted toward protecting the banking industry's clients. But U.S. officials aren’t satisfied because they want a list of names. That part of the request for information is where issues of legality start to emerge. It has been suggested that in order to give U.S. authorities everything that they want, the Swiss government will need to take legislative action, a move that is apparently being resisted at this point.
Mario Tuor, spokesman for the Swiss department for international financial affairs, said, "We are still going for a solution on the basis of existing legal rules in Switzerland," Reuters reported.
Finance minister Eveline Widmer-Schlumpf reiterated the government's position to cooperate within “existing legal framework of administrative assistance,” the Baltimore Sun reported. “There is no need for an emergency law or a separate treaty," Widmer-Schlumpf added.
However, the Baltimore Sun says that Widmer-Schlumpf did note that Switzerland's financial markets regulator (FINMA) may have to be strengthened.
As this plays out, the Banking Business Review (BBR) says Credit Suisse, one of the banks under investigation and reportedly the first to turn over data to U.S. officials, warned staff that the institution has an open mind toward giving up its onshore U.S. wealth management arm. However, BBR says the bank is pointing to second quarter profits as the reason.
In a memo to staff, Credit Suisse' private banking head, Hans-Ulrich Meister, reportedly wrote, “This is more than a cyclical slump, and we are to assume that this difficult environment will not ease in the near future. So, it is all the more essential that we prepare our business accordingly.”
Credit Suisse's American offshore business accounted for 0.5 percent of revenue in private banking, chairman Urs Rohner is quoted as saying in the Baltimore Sun.
Though that may seem like a small figure, it is only one of the banks allegedly involved. Others include HSBC, Basler Kantonalbank, Wegelin and Julius Baer. It is estimated that the information that U.S. authorities are seeking pertains to accounts that could hold sums equaling or exceeding tens of billions of dollars.
© 2015 Moneynews. All rights reserved.